The New ATM App for Smart Phones

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The phone app industry has something for everyone. There is the Girlfriend Minder to help the clueless guy generate time-released automatic texts to continually express his affection for his girlfriend. You can use your smart phone to help you find the cheapest gasoline, tune your guitar, compose a symphony, or even an app that can help you locate a landmine if you are in a particularly gnarly neighborhood.

Soon, if a pilot program currently underway at a trio of banks succeeds, you will also be able to withdraw cash from an ATM by using your smart phone. The banks who are trying out the app are Wintrust in Illinois, BMO Harris in Chicago, and City National which is headquartered in Los Angeles. They have been experimenting with it for a few months and hope to launch it within the next year to their own ATM networks.

Major International Potential

Although those three banks cover a territory that is relatively small, the company that makes the app – FIS Global – is a big, influential player within the banking technology industry. The company won the People’s Choice Award for Payments Innovation at the 2013 BAI Payments Connect Conference and Expo and was named one the world’s top 100 innovative companies by Fortune Magazine. FIS is, in fact, the largest provider in the world devoted to banking payments technologies and it has more than 14,000 financial institution customers across at least 100 different countries.

Last year FIS processed more than $5.5 trillion worth of transactions involving 750 million consumers. The company connects nearly half a million ATM machines and serves 75 percent of the credit unions in the USA. Unlike the many little startup tech outfits that roll out clever digital apps in an attempt to attract venture capitalists, FIS has tons of clout, experience, and power within the industry. If its pilot programs work then you can be pretty sure that soon – perhaps by this time next year – your own bank or credit card issuer will be offering you an ATM app.

How the App Works

As long as you have your smart phone handy you won’t have to carry and swipe any plastic. Just use the app to place an order for cash the way you might use a restaurant’s app to order take-out or make reservations. Then go to an ATM, scan the code provided by the app across the screen of the ATM machine, and voila! The machine will churn out crisp new $20 bills. Your order for money can be placed as much as 24 hours ahead, or you can make it within seconds of approaching the ATM. If you’re standing in line behind other queued-up ATM users, for instance, you can use your phone to punch in the transaction and it will be ready for you by the time you step up to the machine.

Faster and Safer

The key to success for this kind of innovative technology is to bolster consumer confidence that the app is safe to use, while making it so fast, easy, and user-friendly. FIS is working to reduce the number of steps it takes to activate a transaction and also ensure that its security protocols are robust. FIS is doing research to determine, for example, if a 4-digit PIN code is sufficient or if your personal identification needs to be a longer number that will provide additional levels of protection.

Initial Performance Results

Based on the preliminary results it seems that the ATM app may actually be the way of the future. Plus FIS is studying ways to build on its technology platform so that you can conduct other transactions with a similar app, like at gas pumps and restaurants. Javelin Strategy & Research issued a report about the product and published the following:

  • Using the app to perform an ATM transaction takes, on average, less than nine seconds. That’s more than three or four times faster than the conventional card-swiping method.
  • Phone apps cannot be hacked with skimming devices planted in ATM slots and crooks cannot set up surveillance cameras to videotape you punching in your PIN.
  • Stealing (or losing) your phone is still an option, but without your passcode, bank account information, and ATM PIN number whoever gets their hands on it still won’t be able to drain cash from your bank account.

A Possible Weak Link

Using a cell phone does require connectivity, of course, and one of the obstacles that the ATM app faces is beyond the control of its manufacturer or your bank. Without enough bars on your phone to place a call you also won’t have access to your cash – even if you already ordered it through the app. FIS is studying ways to get around that problem, however, and may be able to create a system for the app to work in an offline mode that would not be depend on a decent cell signal.

*The content in this article is accurate at the publishing date, and may be subject to changes.

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